Note 2: Material accounting policies
This note provides a list of the material accounting
policies adopted in the preparation of the Standalone
Financial Statements.
(a) Basis of preparation
(i) The Standalone financial statements comply
in all material aspects with Indian Accounting
Standards (Ind AS) notified under Section 133
of the Companies Act, 2013 (the Act) read
along with [Companies (Indian Accounting
Standards) Rules, 2015] as amended and other
relevant provisions of the Act.
All assets and liabilities have been classified as
current and non-current as per the Company's
normal operating cycle and other criteria set out
in the Schedule III to the Companies Act, 2013.
Based on the nature of products/services and
the time between the acquisition of assets for
processing and their realisation in cash and
cash equivalents, the Company has ascertained
it's operating cycle as twelve months for the
purpose of current/non-current classification
of assets and liabilities.
(ii) Historical cost convention
The Standalone financial statements have
been prepared on a historical cost basis, except
for the following:
(I) Certain financial assets and liabilities that
are measured at fair value;
(II) Defined benefit plans - plan assets
measured at fair value.
(III) Share based payments
(iii) Recent Pronouncements
The Ministry of Corporate Affairs ("MCA”)
notifies new standards or amendments to the
existing standards under Companies (Indian
Accounting Standards) Rules as issued from
time to time. For the year ended March 31,2025,
MCA has not notified any new standards
or amendments to the existing standards
applicable to the Company.
(b) Segment Reporting
Operating segments are reported in a manner
consistent with the reporting provided to the chief
operating decision maker. The chief operating
decision maker of the Company consists of the
Managing Director, and Company Chief Financial
Officer which assesses the financial performance
and position of the Company and makes
strategic decisions.
(c) Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial statements of
the Company are measured using the currency
of the primary economic environment in which
the entity operates ('the functional currency’).
These financial statements are presented
in Indian rupee (INR), which is Company’s
functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated
into the functional currency using exchange
rates at the date of the transaction. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation of monetary assets and liabilities
denominated in foreign currencies at year end
exchange rates are recognized in the Statement
of Profit and Loss. Non-monetary items carried
at fair value that are denominated in foreign
currencies are translated at the rates prevailing
at the date when the fair value was determined.
Non-monetary items that are measured in
terms of historical cost in a foreign currency
are not retranslated.
(d) Revenue Recognition
The Company derives revenue from producing
television programs, internet series, sale or licensing
movie rights, delivering events to its customers,
distribution of films, service fees for content
development and licensing and subscription of its
content to its customers. Some of the contracts
include multiple deliverables, such as promises
to provide a library of content at inception as well
as content updates over the term. The Company
identifies and evaluates each performance
obligation under the contract. Revenue recognition
is based on the delivery of performance obligations
and an assessment of when control is transferred
to the customer. Revenue is recognized either when
the performance obligation in the contract has
been performed ('point in time’ recognition) or 'over
time’ as control of the performance obligation is
transferred to the customer.
Revenue generated from the commissioned
television programs and internet series produced
for broadcasters is recognized over the period
of time (i.e. over the contract period). Contract
asset is recognized when an entity has satisfied
a performance obligation but cannot recognize a
receivable until other obligations are satisfied.
Revenue from sale and licensing of movies - The
Company evaluates if a license represents a right to
access the content (revenue recognized over time)
or represents a right to use the content (revenue
recognized at a point in time). The Company has
determined that most license revenues are satisfied
at a point in time considering limited ongoing
involvement in the use of the license following its
transfer to the customer.
Revenue from licensing of digital content right:
The Company has determined that most license
revenues in respect of digital content are satisfied
at a point in time due to their being limited ongoing
involvement in the use of the license following its
transfer to the customer.
Revenue from events is recognised over the
period of time.
Revenue generated from film distribution is
recognized at a point in time as the films are delivered.
The Company recognises subscription revenue over
the subscription period.
The Company recognises revenue from service fee
for content development where IP is shared with the
customer, as the services are performed.
The transaction price, being the amount to which
the Company expects to be entitled and has rights
to under the contract is allocated to the identified
performance obligations. The transaction price will
also include an estimate of any variable consideration
where the Company’s performance may result in
additional revenues based on the achievement of
agreed targets.
The Company does not expect to have any contracts
where the period between the transfer of the
promised goods or services to the customer and
payment by the customer exceeds one year. As a
consequence, the Company does not adjust any of
the transaction prices for the time value of money.
Revenue excludes any taxes and duties collected on
behalf of the government.
(e) Interest and Dividend Income Recognition:
Interest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset
to that asset's carrying amount on initial recognition.
Dividends are recognized in the Statement of Profit
and Loss only when the right to receive payment
is established, it is probable that the economic
benefits associated with the dividend will flow to the
Company, and the amount of the dividend can be
measured reliably.
(f) Income Taxes
The income tax expense for the period is the tax
payable on the current period’s taxable income
based on the applicable income tax rate adjusted
by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused
tax losses, if any.
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the
country where the Company generates taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation is
subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred tax is provided in full, using the liability
method, on temporary differences arising between
the tax bases of assets and liabilities and their
carrying amounts in the financial statements.
Deferred tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by
the end of the reporting period and are expected to
apply when the related deferred tax asset is realized
or the deferred tax liability is settled.
Deferred Tax assets are recognised for all deductible
temporary differences, unused tax losses and carry
forward tax credits only if it is probable that future
taxable amounts will be available to utilise those
temporary differences, tax losses and tax credits.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
Current and deferred tax is recognized in the
Statement of Profit and Loss, except to the extent that
it relates to items recognized in other comprehensive
income or directly in equity. In this case, the tax is
also recognized in other comprehensive income or
directly in equity, respectively
(g) Leases:
As a lessee
Leases are recognized as a right-of-use asset and
a corresponding liability at the date at which the
leased asset is available for use by the Company
except for short term leases and leases of low
value assets. Contracts may contain both lease
and non-lease components. However, the Company
has elected not to separate lease and non-lease
components and instead account for these as a
single lease component.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities
include the net present value of the following
lease payments:
- Fixed payments, less any lease
incentives receivable
- Variable lease payments
- Amount expected to be payable by the
Company under residual value guarantee
Lease payments are allocated between principal
and finance cost. Finance cost is charged to the
statement of profit and loss over the lease period so
as to produce a constant periodical rate of interest on
the remaining balance of the liability for each period.
Right-of-use assets are measured at cost
comprising the following:
- The amount of the initial measurement of
lease liability
- Any lease payments made at or before
the commencement date less any lease
incentives received
- Any initial direct cost and restoration costs
Right-of-use assets are generally depreciated over
the shorter of the asset's useful life and the lease
term on a straight-line basis.
Payments associated with short-term leases of
equipment and all leases of low-value assets are
recognised on a straight-line basis as an expense
in profit or loss. Short-term leases are leases with a
lease term of 12 months or less.
(h) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand,
fixed deposits with banks, other short-term, highly
liquid investments with original maturities of three
months or less that are readily convertible to known
amounts of cash and which are subject to an
insignificant risk of changes in value.
(i) Inventories
The Company does not have physical
inventory (i.e. goods).
Inventories as disclosed in financial statements
comprise of films, internet programs/web series,
and film rights, and are stated at the lower of cost
and net realizable value.
Inventory for films/ television serials comprise
of costs of production of films or serials that are
awaiting launch / release or unamortised portion
of the costs. Cost is determined based on actual /
amortised cost.
Unamortized cost of films/ television serials : The
cost is amortized in the ratio of current revenue to
expected total revenue. At the end of each accounting
period, balance unamortized cost is compared with
net expected revenue. If net expected revenue is less
than unamortized cost, the same is written down to
net expected revenue.
Inventory for internet programs/web series comprise
of actual cost and includes all cost incurred to
produce/ acquire the web series/ film rights.
Inventory of internet series is amortized as per
the amortization policy of the Company based on
expected pattern of realization of economic benefits.
The amortization begins when the series/episodes
is launched on the Company’s OTT platform.
For music, amortization starts when songs are being
featured and utilized in internet series till the end of
license period.
For any additional cost incurred to acquire an
item of inventory after its launch date, accelerated
amortization is provided on an episodic basis from
the original launch date of the particular episode in
the month of the additional cost being incurred.
Dubbing and Subtitling costs are charged to the
Statement of Profit and Loss as and when incurred.
Net realisable value is the estimated selling price in
the ordinary course of business less the estimated
costs of completion and costs necessary to make
the sale. The Company evaluates the realizable value
and / or revenue potential of inventory based on the
type of programming asset.
(j) Trade receivables
Trade receivables are amounts due from customers
for services performed in the ordinary course of
business. Trade receivables are recognised initially
at the amount of consideration that is unconditional
unless they contain significant financing
components, when they are recognised at the fair
value. The Company holds the trade receivables
with the objective to collect the contractual cash
flows and therefore measures them subsequently
at amortised cost using the effective interest rate
method, less loss allowance
(k) Financial Instruments
(i) Financial Assets
Classification:
The Company classifies its financial assets in
the following measurement categories:
a. those to be measured subsequently at fair
value (either through other comprehensive
income, or through profit or loss), and
b. those measured at amortised cost.
The classification depends on the entity’s
business model for managing the financial
assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and
losses will either be recorded in Statement of
Profit and Loss or Other Comprehensive Income.
Measurement:
At initial recognition, the Company measures a
financial asset at its fair value plus, in the case
of a financial asset not at fair value through
profit or loss, transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
carried at fair value through profit or loss are
expensed in Statement of Profit and Loss.
Assets that are held for collection of contractual
cash flows where those cash flows represent
solely payments of principal and interest are
measured at amortised cost. A gain or loss
on a debt investment that is subsequently
measured at amortized cost and is not part of
a hedging relationship is recognised in profit
or loss when the asset is derecognised or
impaired. Interest income from these financial
assets is included in finance income using the
effective interest rate method.
Assets that meet the following conditions are
subsequently measured at fair value through
other comprehensive income:
• the asset is held within a business model
whose objective is achieved both by
collecting contractual cash flows and
selling financial assets; and
• the contractual terms of the instrument
give rise on specified dates to cash
flows that are solely payments of
principal and interest on the principal
amount outstanding.
Other debt instruments are designated as at fair
value through profit or loss on initial recognition.
Investments in equity instruments are
classified as FVTPL, unless the Company has
irrevocably elected on initial recognition to
present subsequent changes in fair value in
other comprehensive income for investments
in those instruments.
Impairment of Financial Assets
The Company assesses on a forward looking
basis the expected credit losses associated
with its assets carried at amortized cost. The
impairment methodology applied depends
on whether there has been a significant
increase in credit risk. Note 54 details how the
Company determines whether there has been a
significant increase in credit risk.
For trade receivables only, the Company applies
the simplified approach permitted by Ind AS
109 Financial Instruments, which requires
expected lifetime losses to be recognised from
initial recognition of the receivables.
De-recognition of Financial Assets
A financial asset is de-recognised only when:
- The Company has transferred the
rights to receive cash flows from the
financial asset or
- Retains the contractual rights to receive
the cash flows of the financial asset but
assumes a contractual obligation to pay
the cash flows to one or more recipients.
Where the Company has transferred an
asset, it evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the
financial asset is derecognized. Where the
Company has not transferred substantially all
risks and rewards of ownership of the financial
asset, the financial asset is not de-recognised.
Where the Company has neither transferred
a financial asset nor retains substantially all
risks and rewards of ownership of the financial
asset, the financial asset is de-recognised if
the Company has not retained control of the
financial asset. Where the Company retains
control of the financial asset, the asset is
continued to be recognised to the extent of
continuing involvement in the financial asset.
(ii) Financial Liabilities:
Classification as debt or equity
Financial liabilities and equity instruments
issued by the Company are classified
according to the substance of the contractual
arrangements entered into and the definitions
of a financial liability and an equity instrument.
Initial recognition and measurement
Financial liabilities are recognised when the
Company becomes a party to the contractual
provisions of the instrument. Financial liabilities
are initially measured at the fair value.
Subsequent measurement
Financial liabilities are subsequently measured
at amortized cost using the effective interest
rate method. Financial liabilities carried at fair
value through profit or loss are measured at fair
value with all changes in fair value recognised
in the Statement of Profit and Loss.
Derecognition
A financial liability is derecognized when
the obligation specified in the contract is
discharged, cancelled or expires.
(l) Offsetting Financial Instruments
Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on
future events and must be enforceable in the normal
course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
(m) Property, Plant and Equipment
All property, plant and equipment are stated at
historical cost less accumulated depreciation and
accumulated impairment losses, if any. Historical
cost includes expenditure that is directly attributable
to the acquisition of the asset. Subsequent costs are
included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is
probable that future economic benefits associated
with the item will flow to the Company and the cost
of the item can be measured reliably. The carrying
amount of any component accounted for as a
separate asset is derecognized when replaced.
All other repairs and maintenance expenses are
charged to Statement of Profit and Loss during the
reporting period in which they are incurred.
Depreciation methods, estimated useful lives and
residual value
Depreciation is calculated using the straight-line
method to allocate the cost of the asset, net of their
residual values, if any, over their estimated useful
lives which are in accordance with the useful lives
prescribed under Schedule II to the Companies
Act, 2013 except for the following assets which are
depreciated as per Management estimates of their
useful life which are as under:
Studios and sets - 3 years
Leasehold improvements - on a straight-line basis
over the period of lease
The residual values are not more than 5% of the original
cost of the asset. The asset’s residual values and
useful lives are reviewed, and adjusted if appropriate,
at the end of each reporting period. An asset’s
carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is
higher than its estimated recoverable amount.
Gains or losses arising from the retirement or disposal
of a tangible asset are determined as the difference
between the net disposal proceeds and the carrying
amount of the asset and recognised as income or
expense in the Statement of Profit and Loss.
(n) Intangible assets:
(i) Recognition and Measurement
Intangible assets are recognized if they are
separately identifiable and the Company
controls the future economic benefits arising
out of them. All other expenses on intangible
items are charged to the Statement of Profit
and Loss. Intangible assets acquired are
measured at cost as of the date of acquisition,
as applicable, less accumulated amortization
and accumulated impairment, if any.
(ii) Amortization methods and periods
The Company amortizes intangible assets with
a finite useful life using the straight-line method
over the following periods:
• Computer Software: 2-3 years
(o) Impairment of assets
Non-Financial assets are tested for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value
less costs of disposal and value in use. For the
purposes of assessing impairment, assets are
Companyed at the lowest levels for which there are
separately identifiable cash inflows which are largely
independent of the cash inflows from other assets
or Companys of assets (cash-generating units).
Non-financial assets that suffered impairment are
reviewed for possible reversal of the impairment at
the end of each reporting period.
When an impairment loss subsequently reverses,
the carrying amount of the asset (or a cash¬
generating unit) is increased to the revised estimate
of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognised for the asset (or
cash-generating unit) in prior years. A reversal of an
impairment loss is recognised immediately in the
Statement of Profit and Loss.
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